RETAIL MANAGEMENT UNIT-7 STORE PLANNING & MANAGEMENT OF STORE 7.

1 STORE PLANNING, DESIGN & LAYOUT STORE PLANNING (1) LOCATION PLANNING (a) High-street location High customer traffic (b) Destination/Freestanding location Less Foot-fall rate (c) Shopping centre/Mall location Estimating demand for a new location (a) Primary zone 60% to 65% of customers (b) Secondary zone 20% of customers (c) Trade Area 7-eleven attracts customers within a mile whereas Walmart attracts customers upto 10 miles (d) Destination store Customers travel a longer distance to shop bcos of product range & price (e) Parasite store A store attached with a main destination store. For eg., Dry cleaners (2) SITE LOCATION Retailers decision on owning the property or renting or leasing It depends on the nature of the building, faade requirements, size requirements & costs. STORE DESIGN Store Design deals with the strategic plan of identifying the mix of elements to match the needs of the customers (1) Employee Type & density In saree store, one person per 100 sqft whereas one per 400 sqft in biggest stores (2) Merchandise Type & density (3) Fixture Type & Density (4) Sound Type & density (5) Odour Type & density (6) Visual Type (7) Space Mix 60% as selling area, 15% as circulation area, 25% as back area (8) Walls, Roofs, Lightings (9) Floors, Stairs & Elevators (10) Ambience STORE LAYOUT (Silent Guide) Entice customers to move around the sores to purchase more merchandise than they may have originally planned 1) drug store Grid layout Grocery & 2) Racetrack layout (Loop) Suitable for multiple entrances & variety of merchandise

3)

Free-Form (Free-Flow) layout Here Fixtures & Aisles are arranged asymmetrically

4)

Herring bone

5)

Spine 6) 7) Mannequins 8) 9) 10) Windows Point-of-Purchase / Checkout / Cash-wrap Walls Aisle Display (Passage-way) Free-standing Fixtures &

7.2 RETAIL MERCHANDISING

It refers to the entire process of inventory planning & management in a retail organization Merchandise planning Merchandise hierarchy Planogram Graphical Merchandise assortment plan Stock-Keeping Unit (SKU) Open-To-Buy (OTB) function OTB refers to merchandise budgeted for purchase during a certain period of time Category management

MERCHANDISE PRESENTATION TECHNIQUES

Idea-Oriented Presentation, Style / Item presentation, Color presentation, Price lining, Vertical Merchandising Vertical Display, Tonnage Merchandising Large quantities of merchandising, Frontage presentation Here Front-side of the products are displayed. For eg., Books, Fixtures

7.3 PRICING IN RETAILING

Customary: Retailer sets price for goods and maintain them for extended period. For eg., EDLP-Every Day Low Pricing One Pricing: Retailer sets Same price for all customers Odd Pricing: Retail prices are set at levels below EVEN dollar values. For eg., $0.49, Rs.99 Multiple Unit Pricing: A retailer offers discounts to customers who buy in quantity. For eg., By selling items at TWO for $0.75, a retailer attempts to sell more products than at at $0.39. Price Lining: Retailer sell merchandise at a limited range of price points, with each point representing a distinct level of quality. For eg., If the price line for a box of handkerchiefs are Rs.100, Rs.250 and Rs.500, consumers know that distinct product qualities exist. Flexible pricing: This lets consumers bargain over prices. Leader pricing: A retailer advertises and sells selected items in its goods assortment at less than the usual profit margins. The goal is to increase customer traffic for the retailer so that it can sell regularly priced goods in addition to the specially priced items. Bait and switch: Its a part of leader pricing strategy. Here, the prices of certain goods are promoted to attract the customers into the retail store and then the customers are brain washed to buy higher category products. Bundling: A retailer combines several elements in one basic price. For eg., A 35mm camera bundle could include a camera, batteries, case, tripod, charger. Factors affecting pricing decisions

MANAGEMENT OF STORE 7.1 STORE MANAGEMENT RESPONSIBILITIES STORE MANAGEMENT RESPONSIBILITIES

MANAGING STORE EMPLOYEES Recruiting and Selecting Socializing and training Motivation Evaluation Rewarding & Compensating

CONTROLLING COSTS Increasing labour productivity Reducing maintenance costs Reducing inventory losses

MANAGING MERCHANDISE Merchandise Display Working with buyers Suggesting new merchandise

7.2 RECRUITMENT & SELECTION OF STORE EMPLOYEES

(i) Job Analysis It identifies essential activities and is used to determine the qualifications of potential employees. For eg., Apparel salespeople work on an open floor and need to approach customers. Jewelry salespeople work behind a counter, so their customers approach them.

(ii) Job Description 4

It includes (a) activities the employee needs to perform and (b) the performance expectations expressed in quantitative terms. (a) (b) Locating Prospective employees Screening applicants to interview Application forms References Testing Job preview Selecting applicants Preparation for the interview Managing the interview Legal considerations in selecting and hiring store employees

(c)

(d)

Socializing and Training New Store Employees

Socialization is the set of steps taken to transform new employees into effective and committed members of the firm. a) Customer Service Philosophy Fast, Fun and Friendly Walk the Talk Orientation Programs Training Store Employees Structured Program On-the-job training Analyzing Successes and Failures

b) c)

d)

7.3 MOTIVATING & MANAGING STORE EMPLOYEES a) b) c) Leadership Transformational Leaders get people to transcend their personal needs for the sake of the group or organization Motivating employees Setting goals or Quotas: Employees performance improves when employees fee that their efforts will enable them to achieve the goals set for them by their managers theyll receive rewards they value of they achieve their goals Maintaining Morale

d)

7.4 EVALUATION OF STORE EMPLOYEES a) Who should do the evaluation?: The evaluation system is usually designed by the HR department. The evaluation should be done by the employees immediate supervisor-the manager who works most closely with the employee.

b) How often should evaluations be made?:

Most retailers evaluate employees annually or semiannually. Feedback from evaluations is the most effective method for improving employee skills.

 Frequent formal evaluations are time consuming for managers and may not give employees enough time to respond to suggestions.

c) Format for evaluations:

Evaluations are only meaningful if employees know what theyre required to do, what level of performance is expected. Factors used to evaluate are: (i) 50% Sales/Customer Relations: Greeting: Approach customers within 1 to 2 minutes with a smile and friendly manner. Product knowledge: Demonstrates knowledge of product and can relay this information to the customer. Suggests additional merchandise Asks customers to buy and reinforces decisions 25% Operations: Store appearance: Takes initiative in maintaining store presentation standards Loss prevention Merchandise control and handling Cash/wrap procedures: Accurately and efficiently follows all register policies. 25% Compliance: Dress code and appearance Flexibility: Able to switch from one assignment to another, open to schedule adjustments, etc. Working relations: Cooperates with other employees

(ii)

(iii)

d) Evaluation errors 7.5 COMPENSATION & REWARDING OF STORE EMPLOYEES The objectives of a compensation program are To attract and keep good employees, Motivate them to undertake activities consistent with the retailers objectives, and Reward them for their effort. In developing a compensation program The store manager must strike a balance between controlling labor costs and Providing enough compensation to keep high-quality employees. The types of Compensation and Rewarding programs include Straight salary compensation, Incentive compensation plans, Commission method, Quota-bonus plan, Group incentives.

7.6 CONTROLLING COSTS:

Labor scheduling, Store maintenance and Energy management offer opportunities for reducing store reducing expenses:

(i)

Labor Scheduling: Using store employees efficiently is an important and challenging problem.

While store employees provide important customer service and merchandising functions that can increase sales, they also are the stores largest operating expenses. Labor scheduling is difficult because of the multiple-shift In addition, customer traffic varies greatly during the day and the week. Bad weather, holidays and sales can dramatically alter normal shopping patterns and staffing needs.

(ii)

Store Maintenance: Store Maintenance entails the activities involved with managing the exterior and interior physical facilities associated with the store. The exterior facilities include the parking lot, the entrances to the store and signs on the outside of the store. The interior facilities include the walls, flooring, ceiling and displays and signs. Store maintenance affects both the sales generated in the store and the cost of running the store. Maintenance is costly.

(iii)

Energy Management:

The management of expenses on lighting, heating and cooling, is a major issue in store operations, especially in stores with special refrigeration needs such as supermarkets and restaurants. 7.7 REDUCING INVENTORY LOSS An important issue facing store management is reducing inventory losses due to employee theft, shoplifting, mistakes and inaccurate records. End of Unit-7 End of RETAIL MARKETING